1. Yes, the WTO does apply - as between countries, but not between ISO and (for example) Microsoft. What it's intended to do is to provent one country from trying to keep the products of foreign vendors out, using local standard and discriminatory standards conformance testing to make it difficult or impossible to enter their markets. The provisions are found in the Agreement on Technical Barriers to Trade.

2. While in the US industry is by far the dominant force in standard setting, that's not the case in many other countries, such as China or Germany, where the function is centralized, and may occur in governmental or quasi-governmental bodies or agencies.

3. In the case of the International Telecommunciation Union, participation is literally by government appointed representatives. For example, WIMAX was approved by the ITU last week as a 3G telecom standard. In some countries, the representative might be their equivalent to the FCC, but not in others.

4. ISO/IEC has no power over what an individual country chooses to do in its National Body. So while it might change eligibility criteria conditioned on some level of reform, I have a hard time imaginging you'll ever see anything as radical as requiring that individual countries leave voting to government members - and I think that's a good thing, given the lack of good representatives from government for all the types of standards their are, and the lack of government budgets to pay for such action.